On The Market Could New Builds Hurt Your Market? These Areas Are Most at Risk
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May 19, 2025 Austin Wolff, a data analyst from BiggerPockets, dives into the shifting landscape of new home construction. He reveals why builder confidence is dropping even as projects continue—hint: it’s all about survival in a tough market. Wolff highlights regions facing potential oversupply and discusses how increased new builds could lower home prices, impacting both buyers and investors. He offers strategic insights on navigating these trends, emphasizing the importance of market data for real estate investment decisions.
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Builder Sentiment Impacts Prices
- Builder sentiment directly impacts supply, influencing home and rent prices.
- More optimistic builders increase supply, potentially slowing price appreciation.
Builder Sentiment as Leading Indicator
- Construction data lags current market conditions due to permit and build timing.
- Builder sentiment serves as a lead indicator predicting future construction and market trends.
Builder Sentiment Trends
- Builder sentiment dropped sharply after 2022 interest rate hikes from highs near 80 to around 40 today.
- The index oscillates between pessimism and neutral, reflecting economic uncertainty.